The Financial behavior authority (FCA), the UK’s highest financial sector regulator, proposes to raise a ban on crypto exchange notes (CETN) for retail investors in a transition to make the country more in line with international comrades.
As things stand, only professional investors are allowed to access these Digital asset investment products In the UK but in its most recent consultation the regulator proposed to allow individual consumers to access CETS, provided that they are traded on an FCA-approved investment exchange (a recognized investment exchange or RIE).
In a June 6 press releaseThe regulator said that the move would “support Britain’s growth and competitiveness”, while the country brought the country more in line with other jurisdictions such as the United States, Canada, Hong Kong and the EU.
The announcement came along with other suggestions described in a quarterly consultation documents from FCA, which aims to further reduce the burdens of companies and support economic growth.
“This consultation shows our commitment to supporting growth and competitiveness in the UK’s crypto industry,” said David Geale, CEO of payments and digital funding at FCA. “We want to balance our strategy to risk and lift the ban would allow people to make the choice about whether such high -risk investment is right for them, given that they can lose all their money.”
ETNs are a type of bond issued by a bank where they promise to pay investors a return on a specific index minus fees. Unlike location Bitcoin Exchange-traded funds (ETFS) subject too much frenzied debate and investment last year after First Bitcoin ETF went live in January—Eths do not have direct assets.
In other words, with ETFs you own real assets, but with ETNS you trust the issuer’s promise, so there is potentially an increased risk if the issuer fails.
Since January 2021, FCA has banned Sales, Marketing and Distribution of Digital access Derivatives and CETNS to retail consumers “due to the damage they constitute”-this was applied to all UK’s regulated platforms and brokers. In March 2024, the regulator updated his policy To allow CETN for professional investors, such as securities companies and credit institutions that are approved or regulated to operate in the financial markets.
From last Friday, FCA seems to have had a new change in the heart of these products, which flows the opportunity to allow them for individual investors.
If the supervisory authority makes this change – after the consultation period that ends on July 7, 2025 – the rules for financial marketing would still apply to ensure that consumers are informed of the risks and are not offered inappropriate incentives, the same as for direct purchases of digital assets.
FCA’s ban on retail access to Digital asset derivatives will remain in force, with the supervisory authority which says “it will continue to monitor market development and review its high -risk investment strategy.”
FCA did not specify a timeline for when the proposed ETN changes can come into force.
FCA -Regulation Push
The proposed ETN update is only the last step on FCA’s “Crypto travel plan“Against a complete regulation for digital assets follow New suggestions on Stablecoins.
With the final provisions of the European Union Markets in crypto assets (Mica) Regulation that comes into force in January, followed the same month of Pro-Crypto President Donald Trump In the United States and order to initiate a turn of legislative efforts and innovation-friendly regulatory appointments in the country-have the United Kingdom increased its legislative efforts in response.
In April, the Chancellor of the Tax, Rachel ReevesConfirmed that the government is planning to follow its predecessor’s promise to make Britain a digital asset hub.
“Through our change of change, we make Britain the best place in the world to renew – and the safest place for consumers,” Reeves said in April 29 statement. “Robust rules on crypto will increase investors’ trust, support the growth of fintech and protect people across the UK”
This engagement was probably affected by New reports indicating that Britain is leading the world in increasing digital asset ownership among its population by 2025, which goes over even the US and Singapore.
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